GlossaryAccounting & Bookkeeping
Trial Balance
Also called: TB
What is Trial Balance?
A trial balance lists the closing balance of every ledger account with debits in one column and credits in the other. If the two totals agree, the books are arithmetically consistent.
Why Trial Balance matters
The trial balance is the gateway to the financial statements and the fastest way to catch a one-sided posting. It is also where obviously wrong balances stand out, such as a negative bank or a stale suspense account.
Trial Balance formula
Total debits = Total credits
Agreement proves arithmetic, not correctness.
How Trial Balance works in practice
Run it monthly, not annually. Scan for balances that should not exist — a credit balance in an asset account, or anything still sitting in suspense.
Frequently asked questions
No. An entry posted to the wrong account of the same type still tallies perfectly.
Related terms
General LedgerEvery transaction sorted into the account it belongs to.Balance SheetWhat a business owns and owes on one specific date.Suspense AccountA temporary holding account for entries you cannot yet classify.Double-Entry BookkeepingRecording every transaction twice, as a debit and a matching credit.